Tradedoubler. Interim report January-September 2015 Stockholm, 12 November 2015

Transcription

1 Tradedoubler Interim report January-September 2015 Stockholm, 12 November

2 CEO comment In the third quarter we saw good financial results in some markets while others were more challenging. We are making good progress with the development of new solutions that will enable us to expand our addressable market. We will launch a full new commercial product in the first half of In the last months we launched Cookieless Tracking and User Journey Reporting. These ground-breaking products create smarter results for our clients and, together with a strengthened sales force, will improve results for Tradedoubler. Stockholm 12 November 2015 Matthias Stadelmeyer 2

3 The new Tradedoubler 3

4 Tradedoubler repositions as a leading performance marketing partner addressing a larger market Niche player Leading affiliate marketing network Addressing 14% of the market Search 40% Affiliate 14% Branding 20% Other 26% 3 BSEK Current addressable market 3 BSEK Gross Profit 4

5 Tradedoubler repositions as a leading performance marketing partner addressing a larger market Niche player Leading affiliate marketing network Addressing 14% of the market Integrator player Performance marketing partner Addressing 60% of the market Search 40% Affiliate 14% Search 40% Affiliate 14% Branding 20% Branding 20% Other 26% 3 BSEK Other 26% Current addressable market 3 BSEK Gross Profit 5

6 Tradedoubler repositions as a leading performance marketing partner addressing a larger market Niche player Leading affiliate marketing network Addressing 14% of the market Integrator player Performance marketing partner Addressing 60% of the market Search 40% Affiliate 14% Search 40% Affiliate 14% Branding 20% Branding 20% Other 26% 3 BSEK Other 26% 20 BSEK Current addressable market 3 BSEK Gross Profit New addressable market 20 BSEK Gross Profit 6

7 We help digital marketers succeed by creating smarter results through traffic, technology and expertise PARTNER PLATFORM Our proprietary global partner management platform allows you to plug in all your channels and partners and to track and manage all your digital marketing activities in one system. DATA PERFORMANCE We create data-driven insights into the behaviour and intentions of your current and potential customers and target them with personalised advertising that is optimised against your KPIs. ADAPT We have unrivalled expertise in performance marketing. ADAPT, our industry-leading business intelligence tool, allows you to understand the online journeys of your customers. Your digital marketing activity is transparent, accountable and optimised to deliver smarter results. 7

8 How we help digital marketers succeed 8

9 How we help digital marketers succeed Tracked and managed Tracked 9

10 How we help digital marketers succeed Tracked and managed Tracked 10

11 How we help digital marketers succeed Tracked and managed Tracked 11

12 New performance marketing solutions 12

13 Our new performance marketing solution Current status Significantly expanded performance marketing solution being tested in Sweden, Germany, Italy and Spain Uses data-driven insight to deliver targeted, personalised advertising 10 dedicated employees; 20 customers testing the offering at end of October Encouraging initial results on click-through and conversion rates Offering being refined to improve results delivered 13

14 More sophisticated, scalable offering Launching in H Full commercial launch of our new performance marketing solution during H Sophisticated targeting solution uses data-driven insights to target both existing and potential new customers for our clients Highly personalised approach means customers see relevant advertising in the right place, when they are ready to make a purchase Will deliver higher conversion rates and increase digital marketing ROI 14

15 User Journey Reporting in ADAPT Helping our clients understand online customer behaviour User Journey Reporting launched in October Makes sense of complex online journeys and large data sets Gives a full picture of the paths to purchase of online customers across programmes, business models and channels Creates insights that allow our clients to optimise digital marketing spend and deliver smarter results 15

16 User Journey Reporting in ADAPT What the data tells us Identify websites that initiate purchases Detect the number of sites visited and journey length Find websites that influence but don t convert See the sites where sales take place 16

17 User Journey Reporting in ADAPT The benefits of our ground-breaking solution A compelling opportunity for a customer conversation Sales conversations taking place with all major clients Interest is high Benefits of User Journey Reporting in ADAPT for clients: Understand the full online journeys of their customers Makes sense of large, complex data sets Insights into traffic quality New information on how to incentivise publishers They can make informed decisions about optimising their multi-channel digital marketing activity User Journey Reporting drives smarter results for our clients 17

18 Cookieless tracking Increasing the accuracy of our tracking Cookieless tracking was launched in Q3 The increasing number of devices and browsers blocking cookies means smarter technology is required to provide accurate tracking Our solution tracks any internet-connected device, even if access to cookies is blocked This increases tracking volume, accuracy and reliability 18

19 Cookieless tracking How it works 19

20 Redefining our position in this complex marketplace 20

21 The digital marketing landscape is complex and competitive Performance marketing Technology enablers Inventory Lead generation Demand side platform Sell side platform Mobile networks Retargeting Ad server Data supplier Video networks Affiliate Tracking DMP Publishers 21

22 Tradedoubler repositions as a leading performance marketing partner addressing a larger market Niche Player Position: Leading public affiliate marketing network Integrator Position: Leading performance marketing partner Lead Demand side platform Sell side platform Mobile Network Lead Demand side platform Sell side platform Mobile Network Retargeting Ad server Data supplier Video Network Retargeting Ad server Data supplier Video Network Affiliate Tracking Data mgt. platform Publishers Affiliate Tracking Data mgt. platform Publishers Offering Affiliate Affilite PUB Affliate PRI Branding Other PM Search Offering Affiliate, Performance marketing, Branding Affilite PUB Affliate PRI Branding Other PM Search Ad-spend split (%) Ad-spend split (%) GP split WE (BSEK) GP split WE (BSEK) Addressable market: 14% of ad-spend/3 BSEK in GP Addressable market: 60% of ad-spend / 20 BSEK in GP 22 Ad-spend split: Branding 20%, Search 40%, Other performance marketing 26%, Affiliate public 7%, Affiliate private 7% Estimated GP margins: Branding 15%, Search 1,5%, Other performance marketing 20%, Affiliate public 15%, Affiliate private 5% Source: emarketer Western Europe Digital Ad Spending - March 2015; Tradedoubler estimates.

23 Operational update 23

24 Q3 sales update Positive trend in signed estimated value in Q3 compared to previous quarters 60% increase on Q % increase in Affiliate agreements 12% decrease in Technology agreements Weighted sales pipeline is trending upwards; increased focus on international opportunities 24

25 Affiliate and technology update Sales teams strengthend in the markets increased headcount, know-how and experience Focus on roll-out of new products User Journey Reporting in ADAPT Cookieless tracking Further operational focus on Mobile campaign roll-out (based on mobile SDK product release) Publisher promotion planning Publisher commission increase Publisher recruitment 25

26 Q Financial results 26

27 Overall Q3 financials MSEK Q3 Q3 Profit and loss Net sales Gross Profit Gross Margin 20.9% 21.4% OPEX EBITDA One offs 0 6 Reported EBITDA CAPEX -8-3 Cash flow from operations Cash and financial investments Net Cash Net sales in Q3 decreased by 11% versus Q3 last year. Currency adjusted the decline was 16% Gross Profit in Q3 was down by 13%, while the currency adjusted decrease was 17% Operating costs increased by 4% and by 1% currency adjusted EBITDA in Q3 was -3 (12) MSEK Increase in CAPEX are related to increased product development in line with strategy Cash and financial investments were down by -100 MSEK during last 12 months and closed at 310 MSEK at the end of Q3 All numbers in the text above are excluding change related items 27

28 Net Sales Net Sales (SEK M) Q3 net sales was 378 (424) MSEK, a decline of 11% or 16% currency adjusted Currency adjusted year-on-year decline in Q2 was 4% The increased rate of the year-on-year decline in Q3 is mainly due to lower net sales from a few large customers with lower than average margins 0 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Note: All numbers are excluding change related items Details regarding change related items: Above not disclosed change related items for 2014 refers to a correction of prepayments amounting to SEK -10 M in Q and an adjustment referring to Badwill of SEK +1 M in Q The latter refers to the acquisition of Adnologies. In Q2 2015, reported net sales was affected by an one time adjustment of SEK 5 M referring to an adjustment for errors in recurring invoicing to one large customer since mid

29 Gross Profit Gross Profit (SEK M) Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Gross profit Gross margin, % Q3 gross profit was 79 (91) MSEK, a decrease of 13% or 17% currency adjusted Currency adjusted y-o-y decline in Q2 was 13% The increased drop in Q3 mainly referred to the earlier communicated loss of one international client Gross margin declined to 20,9 (21,4) %, mainly due to price pressure Improved gross margin versus Q is due to declining revenues from a few large low-margin customers Note: All numbers are excluding change related items, above not disclosed change related items referred to Net Sales (see previous slide) and an adjustment in cost of goods sold referring to a publisher debt revaluation of SEK +8 M in Q

30 Operating Costs Operating Costs (SEK M) Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Operating costs, excl. dep & amort Change related costs Q3 operating costs were 82 (79) MSEK, an increase by 4% or by 1% currency adjusted The close to unchanged y-o-y cost level is a net effect of increases in selected areas and reductions in others Seasonal decrease versus Q2 related to summer holiday Total headcount in September 2015 increased by 22 to 390 versus last year. Product development grew by 30, of which most were capitalised Note: All numbers are excluding change related items Details regarding change related items: Change related costs in Q and Q mainly referred to severance payments. In Q2 2014, one offs included severance payments and administrative closure of offices. In Q4 2014, change related costs mainly referred to the new strategy, while in Q the non recurring items to the largest part referred to the closing of the Norwegian office, an office move in London and the acquisition of Adnologies. 30

31 EBITDA EBITDA (SEK M) Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 EBITDA Change related items Including change related items, EBITDA in Q was -3 (18) MSEK Excluding change related items, EBITDA in Q was -3 (12) MSEK The lower EBITDA, excluding change related items, is mostly explained by decreased gross profit 31

32 Overall year-to-date financials MSEK YTD YTD Profit and loss Net sales Gross Profit Gross Margin 20.5% 22.1% OPEX EBITDA One offs Reported EBITDA Net sales YTD decreased by 4% versus same period last year. Currency adjusted decline was 10% Gross Profit YTD was down by 11%, while the currency adjusted decrease was 16% Operating costs YTD increased by 1% and decreased by 4% currency adjusted EBITDA YTD was -6 (28) MSEK CAPEX Cash flow from operations Cash and financial investments Net Cash All numbers in the text above are excluding change related items 32

33 Cash flow and financial position MSEK Q2 Q3 Q4 Q1 Q2 Q3 LY LTM YTD Cashflow Q EBITDA incl change related Non cash items Paid tax & interest Changes in working capital CF from operations CAPEX Other CF for the period Opening cash Fx Cash end period Cash end period Short term investments Cash & short term inv Cash and short term inv Bond Loan Net Cash end period Working cap end period Cash and financial investments were down by -62 MSEK during Q1- Q and totalled 310 MSEK end Q3 Above decrease is mainly explained by EBITDA-CAPEX of -47 MSEK and net of paid tax & interest of -12 MSEK Quarterly changes in working capital relate to a large extent to random timings of customer payments Increase in Other during 2015 refers to reduced short term investments related to a new finance policy 33

34 Q A Q&A Questions Q&A Q A 34